With years worth of experience reporting on state-owned entities, Mail & Guardian investigative reporter Sabelo Skiti draws back the curtains for a look at SAA, Dudu Myeni and the ruins left behind
Number 40 3rd Avenue is an unassuming house in the blue-collar neighbourhood of Nigel, a semi-industrial town on the outskirts of the East Rand.
Back in 2015, one room on this property, which had been converted into offices for attorneys, was occupied by Sunday Rambao, a director of Seacrest Investments, a company that hoped to lend the ailing SAA the R15-billion it needed to consolidate its debt.
Seacrest is one of three such chancers whose names have dominated Deputy Chief Justice Raymond Zondo’s commission of inquiry into state capture over the past two weeks.
The others are Free State Development Corporation (FDC) and BNP Capital.
So far, two former SAA employees and two consultant financiers have revealed behind-the-scenes scheming and flouting of corporate governance that goes to the heart of the malfeasance affecting SAA and other state-owned entities.
Reflecting now, it does seem unbelievable that Rambao, a charismatic person who sported a shiny chiskop, wore a suit that was one size too big for him and worked out of this office without so much as a secretary, could have had access to that kind of money.
Even more incredible is that his company’s proposal made it all the way through numerous SAA checks and was entertained by the airline’s board before being discarded after Seacrest refused to provide proof of the funds it intended to loan the airline.
Its fellow contenders would raise similar questions.
At a meeting on December 3 2015 SAA’s board resolved that the virtually unknown FDC, a state-owned agency that exists only to assist small-, medium- and microenterprises in that province, would be the entity to lend them the funds.
Whereas Seacrest had gone through internal teams at SAA to the point of agreeing on a term sheet, the FDC’s unsolicited offer to provide the finance came in the form of a one-page letter sent by its chief financial officer, Shepherd Moyo, to Phumeza Nhantsi, who was interim chief financial officer at SAA.
Accountant Nhantsi, just four days into her first senior job at a corporate, forwarded it to her then chief executive, Musa Zwane. And, just like that, the proposal made it on to the SAA board’s agenda.
The real surprise is that the board, which at the time comprised three non-executive directors and was chaired by Dudu Myeni, not only entertained the letter but resolved and instructed Nhantsi and Zwane to push to make the deal happen.
And, as revealed by former SAA treasurer Cynthia Stimpel, who kicked off the focus on SAA at the Zondo commission last week, the two did just that. It took a stern letter from the then finance minister, Pravin Gordhan, to stop the deal.
At the time an irate senior treasury official remarked: “Where in the hell have you heard of an underfunded provincial entity lending money to a national carrier?”
After this, a new strategy had to be devised. Enter BNP Capital, a “boutique” financier whose only advantage over Seacrest could be said to be its Sandton business address.
In the background it was Myeni, the chairperson of the Jacob Zuma Foundation and close friend of the former president, pulling the strings. Anyone familiar with Myeni knows her to be a highly motivated individual who stops at nothing to get what she wants. If that means dropping Zuma’s name to intimidate people, or holding a board meeting at the president’s residence — complete with him popping in to greet board members and thank them for their service — Myeni will do it.
Nhantsi’s account gives the most near-complete glimpse into Myeni’s exploits at SAA because it comes complete with detailed WhatsApp messages from Myeni and her emissaries.
In Nhantsi’s version, even her secondment as SAA’s interim chief financial officer from the accounting firm SizweNtsalubaGobodo where she worked, was part of a plan she was unaware of.
Within two days of joining SAA she was handed the business card of Masotsha Mngadi, a senior Nedbank executive. She was told that he was Myeni’s personal adviser and could be of use to her.
Two days after that she received a call from Moyo expressing interest in the debt consolidation bid.
Myeni’s motivation, coupled with her powerful support from the Number One office, saw SAA visited by the State Security Agency and the Hawks to conduct lifestyle audits and vetting of all senior managers — commonly referred to as the Top 100 — at the airline.
Though the official reason was the fight against corruption, Nhantsi’s testimony reveals that it was nothing more than an attempted purge by Myeni. For all the naivety and trust Nhantsi displayed in her role, her conduct with respect to Mngadi on the BNP mandate borders on dereliction of duty or even criminal action. This is because she worked and shared information with Mngadi, knowing that he was a Nedbank employee and also an active part of the BNP bid, having delivered and signed for the company’s bid documents himself.
It was Nhantsi’s actions with regard to BNP that would see her ultimately dismissed from SAA in 2018.
Acting on instructions from Myeni and the board, she submitted a proposal to hire BNP as transaction advisers on a R15-billion loan deal at a fee of R258-million.
When that failed — after it emerged that, as in the Seacrest case, very little due diligence had taken place (BNP did not even have a valid Financial Services Board licence) — the company demanded a R128-million cancellation fee.
According to Nhantsi, she raised concerns about the sum, which was eventually dropped to R49.9-million. That figure was important because it was the amount Zwane was allowed to pay without board concurrence.
But Nhantsi insisted on proposing it to the board. Myeni was the only board member to approve the fee.
Nhantsi said that the board submission for the cancellation fee was an act of defiance on her part because she had become wise to the fact that she had been manipulated.
A key indicator that a master strategist was at play is the fact that all three of the dubious entities had guaranteed finance from the same funder, Grissag AG, whose representative, Free State resident Pieter van der Merwe, also appeared before the Zondo commission last week.
During his testimony, Van der Merwe said BNP Capital had contacted him for the funding after two other bids, those of Seacrest and the FDC, which they had also agreed to fund, had failed to conclude an agreement with SAA.
The R15-billion would be sourced by Van der Merwe’s business partner, Sergey Pokusaev, from a consortium of Russian businesspeople whom it would seem had a penchant for backing lost causes.
It’s also worth noting that Nhantsi only enters the frame when her predecessor, Wolf Meyer, who had introduced Seacrest to SAA and led the process of submission to the board, resigned hurriedly after Myeni caught him with a recording device disguised as a pen during a board meeting.
Meyer said he was making the recording to protect himself at a time when SAA was working the Seacrest deal, which seemed doomed because Seacrest was not meeting SAA legal’s muster.
The question now is: Was Meyer protecting himself from the same thing Nhantsi found herself embroiled in?
Nhantsi’s contention is that board meddling and instructions on procurement to executives, particularly in the finance department, was a part of the DNA by the time she got to SAA.
She quoted a board instruction to Meyer, in the same debt consolidation deal, when Myeni and fellow board member Yakhe Kwinana instructed him to cancel the RFP (the request for proposal advertisement that SAA put out to potential funders) process, which only targeted banks, and rewrite bid specifications to include non-financial institutions. Critically, this allowed the likes of Seacrest, the FDC and BNP to come into the deal.
One thing is clear from this week’s revelations about SAA, which tie in with testimonies from Transnet and Eskom before it: that state capture has cut short the careers of too many promising South Africans.
Nhantsi, whether one sees her as a naive accountant introduced to the treacherous world of corporate subterfuge or a willing participant who later jumped ship, is today jobless.
Her reputation has a question mark over it and it will probably be a while before her name isn’t associated with the ailing state carrier.